BitForex, a Hong Kong-based cryptocurrency exchange, has ceased operations without warning. The website is currently down, trading is halted, and users report they cannot access their funds. This sudden shutdown followed reports of an unusual $57 million outflow from the exchange’s wallets, raising fears of a potential ‘rug pull.’
On Monday, on-chain detective ZachXBT raised concerns about suspicious activity at the crypto exchange BitForex. This included an outflow of approximately $57 million from BitForex’s hot wallets on February 23, followed shortly by a halt in processing withdrawal requests. Notably, there has been no subsequent official communication from BitForex.
Seeing some suspicious activity with the crypto exchange @bitforexcom.
On Feb 23 their hot wallets saw outflows of ~$56.5M. Shortly after this time withdrawals stopped processing with no official announcements having been made since.
Currently users are asking questions on… pic.twitter.com/gFEcwExHKh
— ZachXBT (@zachxbt) February 26, 2024
Furthermore, BitForex’s website ‘bitforex.com’ is inaccessible. Initially, a community admin replied in the Telegram group that the exchange was undergoing maintenance, advising users to wait patiently. However, ZachXBT said the admin was no longer active and eventually changed his username.
Users are flooding Telegram and BitForex’s X account, demanding an explanation from the project. Many have accused BitForex of scamming and misappropriating their assets in the comment section.
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The discovery came after the departure of BitForex CEO Jason Luo last month, a change that was announced on the exchange’s website before it went offline.
BitForex previously came under fire from analytics firm Chainalysis, which accused the exchange of inflating its trading volumes in a report covering July 2018 and January 2019.
The closure of BitForex also followed last year’s crackdown by Japan’s financial regulators, who issued warnings to four crypto exchanges, including BitForex, Bybit, Bitget, and MEXC Global, for operating without the necessary licenses.
BitForex currently holds 18% of the total Tellor (TRB) supply and 7% of the total OMI supply in its wallets, according to ZachXBT.
